Who owns your data? Who can sell your data? While some individuals may choose to exchange privacy for free or subsidised digital services, more and more options are in place for those who would prefer not to. This development is thanks largely to governments that have mandated the protection of personal data worldwide and set steep penalties for breaches.
But what about companies’ data? Sales, purchasing and shipping data is the next battlefield, and regulators and platform operators are racing each other to define the standard practices first.
There is much to gain or lose. Digitisation of corporate activities has become crucial as pandemic measures have forced people to work remotely and keep customers and their vendors apart. Trusted communication and methods of transacting are now paramount, but corporates are rightfully not interested in selling their sensitive commercial data in return for either a free or subsidised solution.
Further complicating the situation, network-based digitisation is a classic “chicken and egg” paradox. Networks often need scale to provide user value, but they need to provide user value to achieve scale.
Personal networks can afford to provide free services to help them scale over many years, but only because they are building a business case on the value of their consumers’ data. However, we believe corporate networks should not take this path.
This leaves the industry in somewhat of a stalemate. Platform operators struggle to gain adoption as corporate customers are concerned about how their data will be used. Yet, regulators are continually closing in with stringent rules before the industry gets to take off.
Our Data Privacy Promise
At Contour, we have a simple proposition. We will improve existing corporate processes, offer flexible choices for every size of organisation and let everyone keep their own data. Rather than relying on the value of data, Contour is building a business where the value lies in the global connectivity between banks and corporates, and the global need for working capital finance, risk mitigation and trade facilitation services.
In the past, this was an impossible promise. If a solution provider wanted to connect buyers, sellers and banks on a shared network, there had to be a central platform provider. That central platform provider would technically have access to all the data across it, and it became too lucrative an asset to not try to monetise in some way. This has led, rightfully, to mistrust of any platform provider seeking to provide a common network.
The Role of Decentralised Networks
The innovation making the impossible possible is decentralisation. It allows for network members to host their own data if they choose to do so and for the network operator to have zero access to any commercial data that crosses their network. The operator exists as a connector only, as a conduit and not an intermediary.
“Rather than relying on the value of data, Contour is building a business where the value lies in the global connectivity between banks and corporates, and the global need for working capital finance, risk mitigation and trade facilitation services.”
There is still work to do. Networks like Contour empower not just innovation but also collaboration, which will also be key to expanding the network globally. Collaborative networks can be widely owned and controlled from a neutral point and can align the interests of the network operators and the network members.
Decentralised networks also fit into the regulatory structures of today and the future. For example, a regulator demanding that commercial data be hosted within their borders can stifle growth and access to innovative products for their country. With a decentralised network, they can have the best of both worlds, as decentralised networks can drive business growth and comply with government regulations with ease.
Choosing the Right Level of Decentralisation
The final equation is finding the right amount of decentralisation for your business. All banks and corporates that join Contour have flexibility in determining the right level of decentralisation for them. We offer everything from a simple, low-cost “software as a service” solution where data will never be monetised and there is some choice in where it is physically located, to a complete self-hosting proposition where the network member can host their own data in any cloud or server in the world at their discretion.
It is not one size fits all. A large organisation may want to choose a SAAS offering in countries where there are liberal restrictions on corporate data and then pay a higher cost to self-host in more restrictive jurisdictions. The true path to scale will be for network operators to remove as many barriers and arguments against joining as possible so that even a relatively small process improvement will be too attractive for a corporate to resist.
The only thing left to decide is which is the right fit for your organisation.
To learn more about the right level of decentralisation for your company, watch my CordaCon 2021 interview with 汇丰银行 and 曼谷银行 on the guiding factors that helped in their decision-making.
This article also appeared under the ICC’s Essential Reading site.